Weekly Freddie Mac Average

Government-backed mortgage lender Freddie Mac publishes weekly average 30-year mortgage interest rates every Thursday. Last week’s reading rose another 10 basis points to 6.54%, while the 6.08% reading four weeks ago was the lowest average since September 2022. Last October, Freddie Mac’s average rose to a 23-year historical high of 7.79%.

Freddie Mac’s average is different than what we report for 30-year rates because Freddie Mac weekly An average blended of the previous five days’ rates. In contrast, our Investopedia 30-year average is a daily read and provides a more precise and timely indication of rate movement. Additionally, the criteria for included loans (e.g., down payment amount, credit score, inclusion of discount points) vary between Freddie Mac’s methodology and ours.

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What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors such as:

It is often difficult to attribute the change to any one factor, as any of these can cause fluctuations simultaneously.

Macroeconomic factors kept the mortgage market relatively low through most of 2021. The Federal Reserve, in particular, was purchasing billions of dollars of bonds in response to the economic pressures of the pandemic. This bond purchasing policy It is an important determinant of mortgage interest rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making large cuts every month until it reached net zero in March 2022.

Between then and July 2023, the Fed aggressively raised interest rates. federal funds rate Fighting decades of high inflation. While the federal funds rate can affect mortgage rates, it does not do so directly. In fact, the federal funds rate and mortgage rates may move in opposite directions.

But given the historic pace and magnitude of the Fed’s rate hikes in 2022 and 2023 — raising the benchmark interest rate by 5.25 percentage points over 16 months — even the indirect impact of the federal funds rate has led to a dramatic upward impact on mortgage interest rates over the past two years . years.

The Fed kept the federal funds rate at its peak level for almost 14 months, starting in July 2023. However, on September 18, the central bank announced the first interest rate cut A series of declines is expected in 2024 and possibly 2025. This initial decrease was 0.50 percentage points.

The Fed’s next interest rate announcement will be made on November 7.

How We Track Mortgage Rates

The national and state averages referenced above are provided as is through the Zillow Mortgage API. loan-to-value (LTV) ratio 80% (i.e. at least 20% down payment) and the applicant’s credit score is in the range of 680-739. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications; these rates may vary from advertised teaser prices. © Zillow, Inc., 2024. Use subject to Zillow Terms of Use.